US open: Wall Street gets off to a week start ahead of Fed decision

Wall Street got off to a weak start on Tuesday as investors eyed the latest policy announcement from the US Federal Reserve due out the next day, while concerns about the debt ceiling continued to play on investors’ minds.

At 1522 BST, the Dow Jones Industrial Average was down by 1.10% to 33,673.39, alongside a 1.11% drop on the S&P 500 to 4,122.13 while the Nasdaq Composite fell 0.91% to 12,09.04.

The yield on the benchmark US 10-year Treasury yield meanwhile was 12 basis points lower to 3.45%.

In the background, the Fed's two-day policy meeting was set to get under way, amid expectations that it would deliver a 25 basis points rate hike on Wednesday.

Neil Wilson, chief market analyst at Markets.com, said: "Such a move would bring the Fed funds rate to a range of 5%-5.25%, in line with its current central forecast for the peak in interest rates. The recent banking crisis may see the Fed look to be more cautious, whilst there has been evidence of disinflation, albeit core readings for price growth remain stubbornly high.

"Final hike? Markets price a one-in-four likelihood of a further hike in June, with cuts coming by the end of the year, though this is not what Fed policymakers believe will happen. And what about the debt ceiling? Hard to see the Fed be too hawkish until that is resolved."

The day before, the head of the US Treasury, Janet Yellen, warned Congress in a letter that the government might run out of cash as soon as 1 June unless lawmakers approved a debt ceiling increase.

Nevertheless, Yellen said predicting the exact timing was difficult.

Indeed, some analysts believed that in a somewhat rosier scenario the Treasury might be able to make do until well into July.

In corporate news, Morgan Stanley announced that it was reading 3,000 job cuts.

Shares in Chegg - which provides online guidance for students preparing tests - nearly halved after it warned over the impact of AI chatbots on its homework-help services. In its first-quarter earnings on Monday, the company said that since March, it had seen "a significant spike" in student interest in ChatGPT.

"We now believe it’s having an impact on our new customer growth rate," it said.

Shares of Pfizer were flat following its latest second quarter results, but those of DuPont were trading down by 10% after the chemicals maker missed analysts' sales forecasts for the latest quarter.

Uber on the other hand was adding 7%.

S&P 500 - Risers

Molson Coors Beverage Co. Class B (TAP) $65.59 +8.50%

Broadridge Fin Sol (BR) $151.45 +5.04%

Marriott International - Class A (MAR) $177.77 +4.48%

Leggett & Platt Inc. (LEG) $32.67 +4.16%

Zimmer Biomet Holdings Inc (ZBH) $144.06 +3.77%

Flowserve Corp. (FLS) $35.13 +3.57%

Amerisource Bergen Corp. (ABC) $170.85 +2.43%

Ametek Inc. (AME) $142.18 +2.04%

Gartner Inc. (IT) $313.61 +1.95%

McKesson Corp. (MCK) $360.39 +1.80%

S&P 500 - Fallers

Arista Networks Inc. (ANET) $140.93 -12.01%

Zions Bancorporation (ZION) $24.01 -10.48%

Comerica Inc. (CMA) $38.44 -9.55%

Keycorp (KEY) $9.81 -8.54%

FMC Corp. (FMC) $113.65 -8.17%

Sealed Air Corp. (SEE) $44.07 -7.94%

Bread Financial Holdings, Inc. (BFH) $25.11 -6.48%

Halliburton Co. (HAL) $30.49 -6.33%

Dish Network Corp. (DISH) $6.95 -6.21%

Citizens Financial Group, Inc. (CFG) $27.07 -6.06%

Dow Jones I.A - Risers

Merck & Co. Inc. (MRK) $117.89 +1.33%

Johnson & Johnson (JNJ) $164.91 +0.80%

Microsoft Corp. (MSFT) $306.85 +0.42%

Procter & Gamble Co. (PG) $156.69 +0.08%

Dow Jones I.A - Fallers

Chevron Corp. (CVX) $161.62 -3.36%

Walgreens Boots Alliance, Inc. (WBA) $33.50 -3.21%

Caterpillar Inc. (CAT) $212.17 -2.35%

American Express Co. (AXP) $155.59 -2.34%

Goldman Sachs Group Inc. (GS) $333.11 -2.19%

Verizon Communications Inc. (VZ) $37.89 -2.12%

Visa Inc. (V) $228.39 -1.77%

Dow Chemical Co. (DOW) $53.18 -1.72%

3M Co. (MMM) $104.18 -1.57%

Walt Disney Co. (DIS) $100.90 -1.28%

Nasdaq 100 - Risers

Marriott International - Class A (MAR) $177.77 +4.48%

Vertex Pharmaceuticals Inc. (VRTX) $350.36 +1.55%

Microchip Technology Inc. (MCHP) $76.51 +1.50%

Check Point Software Technologies Ltd. (CHKP) $120.13 +1.36%

Amazon.Com Inc. (AMZN) $103.26 +1.19%

Analog Devices Inc. (ADI) $184.31 +0.97%

Tesla Inc (TSLA) $163.39 +0.96%

Booking Holdings Inc. (BKNG) $2,705.65 +0.54%

Cadence Design Systems Inc. (CDNS) $211.57 +0.44%

Microsoft Corp. (MSFT) $306.85 +0.42%

Nasdaq 100 - Fallers

Qurate Retail Inc. (QRTEA) $0.71 -7.94%

Dish Network Corp. (DISH) $6.95 -6.21%

Incyte Corp. (INCY) $71.09 -5.64%

Hologic Inc. (HOLX) $83.71 -4.52%

JD.com, Inc. (JD) $34.05 -4.06%

Broadcom Inc. (AVGO) $614.19 -3.72%

Baidu Inc. (BIDU) $116.81 -3.69%

Idexx Laboratories Inc. (IDXX) $473.05 -3.38%

Walgreens Boots Alliance, Inc. (WBA) $33.50 -3.21%

Paypal Holdings Inc (PYPL) $72.99 -2.82%